Virtually every organization may be described as a system that converts one or more resources into one or more products or services. For example, a manufacturing organization converts raw materials, the fixed or capital resources of a manufacturing plant, and labor into a physical product. Likewise, a service organization transforms raw materials, labor, office space, and any necessary equipment into services for its customers. Income and expenses are inherent features of both types of organizations. The efficiency of an organization in using these resources is a direct measure of organizational performance.
Typically, organizations use a wide variety of methods to measure their performance. A manufacturing organization, for instance, may consider data such as labor hours per unit of production, total or incremental costs per unit of production, income per unit of production, or defects per unit of production in measuring its performance in these types of organizations. By considering the service provided by a service organization to be its "product," it is feasible to use similar measures to gauge organizational performance in these types of organizations. These measures of performance tend to focus on one or more particular aspects of an organization.
In order to measure and improve overall performance, managers frequently analyze these measurements that together can form voluminous and complex data sets. In most cases, however, the manager must ultimately rely heavily on his or her experience and skill to balance and identify the various aspects of organizational performance. Once this is done, the manager determines which aspects of the organization require improvement and tries to prioritize efforts to achieve these improvements. After modifying the organization as suggested by the foregoing analysis, the manager must compile new data that relate to the performance of the modified organization and compare that data with the previous data to see how beneficial the modifications may have been. The process of collecting and analyzing data may take considerable time. During this time, however, ineffective or counter-productive operations may remain in place. These time delays and managerial inefficiencies often work to the detriment of the organization's overall efficiency.
Consequently, there is a need for a method and system that permit active or real-time assessment of an organization's performance to aid managers or other users in analyzing and improving the organization's efficiency.
There is a need for a method and system to permit a user to quantitatively and realistically assess an organization's efficiency. There is a further need for a method and system to permit a manager to analyze an organization's performance on a variety of levels including between groups of an organization as well as between time periods of the organization's operation.
There is a further need for a method and system of determining the effect that different organizational performance parameters have on one another. The method and system should also inform the user of what variables most strongly affect the organization's performance. To be useful, such a method and system should not require extensive programing or data entry.